Correlation Between Capitec Bank and Zeder Investments
Can any of the company-specific risk be diversified away by investing in both Capitec Bank and Zeder Investments at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Capitec Bank and Zeder Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capitec Bank Holdings and Zeder Investments, you can compare the effects of market volatilities on Capitec Bank and Zeder Investments and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Capitec Bank with a short position of Zeder Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitec Bank and Zeder Investments.
Diversification Opportunities for Capitec Bank and Zeder Investments
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Capitec and Zeder is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Capitec Bank Holdings and Zeder Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zeder Investments and Capitec Bank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Capitec Bank Holdings are associated (or correlated) with Zeder Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zeder Investments has no effect on the direction of Capitec Bank i.e., Capitec Bank and Zeder Investments go up and down completely randomly.
Pair Corralation between Capitec Bank and Zeder Investments
Assuming the 90 days trading horizon Capitec Bank Holdings is expected to generate 0.64 times more return on investment than Zeder Investments. However, Capitec Bank Holdings is 1.55 times less risky than Zeder Investments. It trades about 0.14 of its potential returns per unit of risk. Zeder Investments is currently generating about 0.01 per unit of risk. If you would invest 13,894,000 in Capitec Bank Holdings on August 31, 2024 and sell it today you would earn a total of 18,717,800 from holding Capitec Bank Holdings or generate 134.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capitec Bank Holdings vs. Zeder Investments
Performance |
| Timeline |
| Capitec Bank Holdings |
| Zeder Investments |
Capitec Bank and Zeder Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capitec Bank and Zeder Investments
The main advantage of trading using opposite Capitec Bank and Zeder Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitec Bank position performs unexpectedly, Zeder Investments can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Zeder Investments will offset losses from the drop in Zeder Investments' long position.| Capitec Bank vs. Safari Investments RSA | Capitec Bank vs. Afine Investments | Capitec Bank vs. eMedia Holdings Limited | Capitec Bank vs. Deneb Investments |
| Zeder Investments vs. Ascendis Health | Zeder Investments vs. HomeChoice Investments | Zeder Investments vs. Astral Foods | Zeder Investments vs. Frontier Transport Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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